Construction World July 2017

Solid financial results Balwin, South Africa’s largest homebuilder focusing on large scale sectional-title residential estates in high-growth, high-density metropolitan nodes in South Africa’s major cities, recently announced solid financial results for the year ended 28 February 2017.

Balwin had 13 developments under construction during the period, and in line with its forecast, sold 2 711 apartments at an average selling price of R995 000 per unit. Revenue increased 30% to R2,7-billion and gross margin remained on target at 37% in spite of an increase in construction related costs. Profit for the period improved 18% to R661-million. Steve Brookes, chief executive officer and founder of Balwin said: “We have delivered an excellent performance underpinned by our high quality, affordable product offering coupled with exceptional project cost management. The fact that we operate in diverse locations across high density urban nodes ensures the sustainability of our business and ability to create shareholder value.” Balwin listed on 15 October 2015 and is differentiated from other JSE listed property companies and REITs as its business strategy is underpinned by generating profits through the development and sale of large-scale residential estates. These estates average in size between 500 and 1 000 units and offer buyers secure, affordable, high-quality and environmentally friendly one, two and three bedroom apartments ranging in size from 45 m 2 to 120 m 2 . Balwin’s investment proposition is backed by a robust, proven, business model supported by urbanisation and growth of the middle class. The Company mitigates risk by matching construction to pre-sales and rolling out developments over several phases which are financed per phase. The company’s success is based on a

continuous development approach – selling 20 to 25 units per location, per month in diverse locations in order to maintain price tension in the market as well retain artisanal expertise across sites. Balwin launched six new developments during the financial year namely; Malakite and Amsterdam in Johannesburg, Grove Lane and The Blyde in Pretoria, The Sandown in the Western Cape and The Polo Fields, Balwin’s first development in Waterfall. Pre-sales at Westlake and The Sandown have been pleasing, reaching over 25 and 30 apartments per month respectively. The Polo Fields, which was launched in February 2017, achieved over 300 pre-sales and the first phase is expected to be handed over in August 2017. A couple of developments were launched just post year end and all have experienced significant demand. The Whisken in Johannesburg North and Kikuyu, Balwin’s first development in Waterfall Fields, achieved over 200 pre-sales while the first phase of The Jade in the Western Cape is largely sold out. “We are continually seeking innovative initiatives to differentiate our product. The latest such innovation is the addition of a Crystal Lagoon to The Blyde, our first development in Riverwalk. This will be the maiden Crystal Lagoon in sub- Saharan Africa and offers buyers a one-of-a-kind lifestyle. In line with its strategy communicated at listing, Balwin acquired a parcel of land in Ballito, Durban which earmarks its entrance into the KwaZulu-Natal housing market. The land acquired can accommodate over 2 500

Steve Brookes, chief executive officer and founder of Balwin.

apartments which will be developed over a period of eight years with development expected to be launched during the current financial year. KwaZulu-Natal is a strategic growth area for Balwin and the Company aims to acquire further land for development. Balwin has opened an office in Umhlanga in order to commence operations and has appointed Anthony Diepenbroek to manage the division. “The acquisition of a parcel of land in Ballito, Durban marks Balwin’s entrance into the KwaZulu-Natal housing market, a strategic objective identified at the time of listing. “Our secured development pipeline has been extended to 33 786 apartments to be rolled out over approximately ten years which will sustain our future growth. “We are mindful of the challenging economic conditions that lie ahead. Balwin's business model allows for flexibility to rapidly adapt to prevailing market conditions and reduce risk. Levers that we have at hand include varying the rate of construction according to the rate of sales to improve cash preservation and adjusting certain development phases to contain more one- and two-bedroom apartments to maintain sales and margins.” 

recognise the substantial equivalency of fellow signatories’ validation systems in architectural education. For instance, architectural graduates wishing to register for accreditation in the United States of America, with its regulatory body called the National Council for Architectural Registration Boards (NCARB) will find that it automatically gives those registered with a CA signatory a substantial number equivalent credits required to pass the NCARB’s Education Evaluation Services for Architects (EESA). It is the first time that SACAP sits at an equal level with all signatories at the CA. Dr Yashaen Luckan, President of SACAP, explains, “We’re proud that Council’s committed efforts to promote high quality professional qualifications criteria and national syllabi, based on international standards, have been recognised. It follows our achievement last year of entering a Memorandum of Understanding with the Architects’ Council of Europe. 

LEFT: SACAP President, Dr Yashaen Luckan, and the Registrar/CEO of SACAP, Marella O’Reilly.

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